For seven years, researchers at the Institute for Policy Studies and United for a Fair Economy have examined the ever-increasing gap between pay levels for corporate Chief Executive Officers (CEOs) and workers. The purpose of our annual studies has been to raise awareness of the trend towards rising inequality that we believe is inconsistent with a healthy democracy and basic principles of economic fairness.
Over the years, as CEO pay packages in the tens if not hundreds of millions of dollars have become increasingly routine, the shock value has begun to ebb. Unfortunately, this year’s report once again confirms the predictable — that inequality between executive and worker pay continued to grow in 1999.
However, even the most jaded CEO pay watchers were amazed last year by the explosion of earnings among the new class of leaders in the Internet economy.
Virtually overnight, a large number of these new corporate bosses saw their paper wealth explode — in some cases to over a billion dollars. Although some of these stock option treasure chests have declined in value because of a fickle stock market, the speed at which the Internet leaders have amassed such sums is clearly the story of the year in CEO pay.
Following an update of the trends of the 1990s, this year’s report focuses in on the Internet pay explosion and examines the arguments in support of unlimited pay for leaders in this rapidly developing sector. The report then analyzes how exorbitant pay in the private sector affects the public sector, particularly as the government faces an impending employment crisis in the top ranks. We end with recommendations to close the wage gap.